Using assets as resilience capacities for stabilizing food demand of vulnerable households

Abstract

In the absence of governmental welfare support, assets have an important role in determining the capacity of vulnerable households of being resilient against economic shocks affecting their food needs. By focusing on the context of Sub-Saharan Africa, this paper analyses household responses in food demand to shocks affecting their food purchases. We analyze the effects of non-agricultural assets, livestock ownership, and crop stocks on stabilizing poor household's food demand by integrating them as proxies for resilience capacities into a Quadratic Almost Ideal Demand System. We find that those non-agricultural assets mostly reduce the sensitivity of demand of poor households for protein foods, pulses, and greens. Hence, poor households' demand for core nutrition items can be made more robust to shocks if their endowment of non-agricultural assets that raises their resilience capacities is improved. This can be achieved by establishing insurance packages as in the case of weather index-based insurance for smallholder farmers, or upscaling interventions that increase and stabilize households' assets.